India said it would immediately suspend the Indus Waters Treaty with Pakistan as part of measures to downgrade diplomatic ties with its neighbour after militants attacked tourists in Kashmir, killing 26 men.

Pakistan closed its air space for Indian airlines and rejected New Delhi's suspension of a water sharing treaty on Thursday in retaliation for neighbouring India's response to a deadly militant attack in the Indian-ruled part of Kashmir.

Pakistan warned India on Thursday that it was committing an "act of war" by suspending a landmark water-sharing treaty in response to a deadly terror attack in Indian-controlled Kashmir. The threat from Pakistan Prime Minister's Office followed a number of diplomatic measures imposed by New Dehli on Islamabad as tensions flare between the neighboring nuclear powers.